The fact is that money can only be saved by investing it. The problem is that everyone wants infinite wealth, but there are serious limits on how much can be profitably invested. Think for a moment where all the money the government borrows would be invested if the government wasn't borrowing it?Credit cards, sub-primes morgages, government debt, etc. It's all the same big paper bubble and it's going to continue to be blown up, with any holes papered over with more paper, until it can go on anymore. Then the oil drains out of the motor and it blows up.

http://www.exterminatingangel.com/index.php?option=com_content&task=view&id=203&Itemid=118

The same people (ie Jesse Jackson) who once decried banks for redlining when they didn't lend money to poor people now scream predatory lending when banks lend money to the poor. People should cultivate more wisdom but the poor who are inexperienced with money matters clearly need more independent guidance, advice, and direction. This would be a good task for organizations such as the Urban League.

Also, in North Carolina, where I live, the poor who bought homes have also brought ghetto behavior with them. Crime, blight and drug dealing are now present in starter home neighborhoods as well as in the PJ's. This goes to show that poverty is a culture and lifestyle as well as a lack of money.

I don't have statistics on how many buyers were duped, but I've heard enough anecdotes to believe many were defrauded. There are people who claim they read their documents, and then found the copies they were handed to sign were different form what they read. People were lied to about what small print legalese meant. People who were told they could refinance. Even if buyers should have been more careful, that doesn't excuse those who deceived them. I just have no sympathy for the subprime brokers. Besides, it seems like the homeowners get the blame while the investors who bought these investments that promised high interest for no risk just get sympathy and the banks get talk of bailouts.

Eric:

If the buyers were duped, then they HAVE an remedy available to them via a class-action case against the lenders for fraud. You can bet that any plaintiff's lawyer admitted to the bar would love to get a piece of THAT case.

By and large, though, George Will is correct here. A lot of people signed away a LOT of money because they didn't think things through, and now the cost of that is going to be transferred to those of us who know how to manage our money.

I get it that people feel that personal responsibility should have guided people away from the "bad" loans they were offered and signed for. But guess what? Way too many of the agents that were selling these instruments were being less than straight with the applicants about the consequences of signing the forms. And guess what else? Most of the people who signed for these loans were ALREADY homeowners who were re-financing current homes and the bulk of them haven't been hit by the tidal wave -- yet.

During the Great Depression, 75% of the workforce was gainfully employed, but the fate of the other 25% affected everyone. Next year all the talk of "personal responsibility" will fade away once people realize that hundreds of thousands of homeowners who did "know better" but trusted the "financial professionals" to guide them thru the process got caught in this cesspool.